Question

 The following graph shows the supply curve for a group of sellers in the U.S. market for tablets (orange line). Each seller has only one tablet to sell. The market price of a tablet is shown by the black horizontal line at $175.

 Each rectangle on the graph corresponds to a particular seller in this market: blue (circle symbols) for Paolo, green (triangle symbols) for Sharon, purple (diamond symbols) for Van, tan (dash symbols) for Amy, and orange (square symbols) for Carlos. (Note: The name labels are to the right of the corresponding segment on the supply curve.)

 Use the rectangles to shade the areas representing producer surplus for each person who is willing to sell a tablet at a market price of $175. (Note: If a person will not sell a tablet at the market price, indicate this by leaving his or her rectangle in its original position on the palette.)

 Based on the information on the preceding graph, you can tell that _______  will sell tablets at the given market price, and total producer surplus in this market will be _______ .

 Suppose the market price of a tablet increases to $275.

 On the following graph, use the rectangles once again to shade the areas representing producer surplus for each person who is willing to sell a tablet at the new market price: blue (circle symbols) for Paolo, green (triangle symbols) for Sharon, purple (diamond symbols) for Van, tan (dash symbols) for Amy, and orange (square symbols) for Carlos. (Note: If a person will not sell a tablet at the new market price, indicate this by leaving his or her rectangle in its original position on the palette.)

 Based on the information in the second graph, when the market price of a tablet increases to $275, the number of sellers willing to sell a tablet _______  to _______ , and total producer surplus _______  to _______ .

Answer 1

Blanks-

1) three sellers

2) (175-25)+(175-75)+(175-125) = 300

3) increases

4) four sellers

5) increases

6) (275-25)+(275-75)+(275-125)+(275-225) = 650